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As sure as retailers start their Christmas buying blitz, financial planners and mutual fund companies start their advertising campaigns. It's a bombardment that starts in October and continues to February.
With so much information (or lack thereof) and so much to choose from, how do you decide which fund's for you? This mutual fund season LBM decided to ask local financial planners what their picks would be for mutual funds both in and out of the RSP. While their answer would naturally vary from client to client--according to his or her risk tolerance and financial situation--the following is a selection for an investor 10 years from retirement with enough funds for both RSP and non-registered fund.
Bruce Scott of Regal Capital Planners says risk tolerance is key to finding the right fit between client and product, "No two people have identical feelings on this topic." For an RSP plan, Scott recommends Trimark Select Balanced. "One important thing is a good track record, and this fund has established itself." It offers growth potential joined to stability by combining blue chip equities and bonds. Scott also advises clients to maximize the allowable foreign content to capitalize on the advantages of global diversification. For this goal, he points to Templeton Growth.
"A five-year record is a useful indicator of a fund's potential" says Scott "Ten or 15 years is even better." This rule also applies to the selection for an open plan, "Funds specializing in either one county or one market segment are not for every investor." Diversification holds greater potential for long term returns. With an eight-year record, Trimark Select Growth gets the nod. "This fund will meet the aggressive investor's diversification goals," says Scott.
Craig Wood of Craig Wood Investment Counsel Inc. stresses consistent planning so investors will be on track and have the foundations in place. Thus they have no need to make up lost time by overweighting in equities and can concentrate on low volatility and returns in the low double-digit range.
For the RSP, Wood suggests Ivy Canadian fund. "It has 35 per cent cash holdings and can buy good value during a downturn." The fund should only fall at half the rate of the markets during a decline, an important consideration...